May 2, 2014

Good Unemployment Numbers? Let's Be Clear, Not Really.

More coming soon.
The real picture on unemployment is getting overlooked on a regular basis by the mainstream media.  So the latest numbers, showing a drop of unemployment from 6.7% to 6.3% can expect to have a lot of hoopla in support of the president.  But those of us who look beyond the headlines realize that the jobs report for April 2014 are anything but good.

Rather than rehashing the details, let me just quote Neil Irwin from the New York Times:
Rarely does a monthly report on the United States job market look so terrific on the surface while being so disappointing underneath.

At first glance, the new reading on the nation’s employment situation is shout-from-the-roof-tops, pop-the-Champagne fantastic. The unemployment rate fell to 6.3 percent from 6.7 percent, and employers added a whopping 288,000 jobs, the most in two years. Those types of numbers, if sustained, would signal something better than just the humdrum, sluggish recovery of the last few years, and something far more robust.

The details of the April job report, though, threw serious cold water on that proposition. The number of people in the labor force fell by a whopping 806,000, wiping out the February and March gains and a bit of January as well. The labor force participation rate fell by 0.4 percentage points to 62.8 percent, returning to its December level.

And the number of people reporting they were unemployed fell by 733,000, which sounds good on its surface, but paired with the similar-sized decline in the labor force points to job seekers giving up looking rather than finding new employment.
Kudos to the NYT for reporting on the softness of the numbers. The mainstream media gets a point in the plus column for a change. Then again, the NYT instead has this report on it's front page (online) "Report Shows Resurgence of Hiring but Has Downbeat Notes" and as it's main article on the subject. Reading through it the report seems to be reasonably neutral in tone. But it's still early. After the president's team gets a chance to spin this, you can bet the NYT will be onboard with the rah-rah cheerleading as we head towards the midterm elections.

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